Have you moved or renamed your SE:IV directory since installing? If you so, you'll need to edit the registry entry for the game to point to its new location so the patch will work.
Also, are you installing the 73Mb patch? That's the one you should be using.
There's been occassional problems with the time stamps of .exes in the past, but that's probably not the case here.
I got the 1.94 to work and it looks fine. Since SE5 is coming I will leave it at the 1.94 version.
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You have to install 1.94 before you can install 1.95. 1.95 is not capable of patching from anything previous to 1.94 (or 1.93 for purchasers of Deluxe).